Re:Berlin Fought Soaring Rents and Lost
by Bostonian on Wednesday November 15, 2023 @08:30AM
(#38276399)
Other things being equal, more construction will lower rents. Has Berlin encouraged construction? If rents rise because a city is a great place to live, there may be no problem to solve.
Re:Berlin Fought Soaring Rents and Lost
by SenAnder on Wednesday November 15, 2023 @08:42AM
(#38276500)
The highest-density places, i.e. the ones with the most construction, tend to also have the highest rents, so empirically, the opposite of your claim is true.
Re:Berlin Fought Soaring Rents and Lost
by Bostonian on Wednesday November 15, 2023 @08:58AM
(#38276640)
I think the reason for this is that high rents stimulate construction. If you do a bivariate time series analysis with annual average rents and construction levels, I don't think you will find that increased construction raises rents.
I invest in real estate investment trusts (REITs). Analyst reports on apartment REITs project future rents inversely based on construction. Analysts believe that more apartment construction tends to lower rents.
This is not too surprising, but may be specific to large and/or lax-on-immigration countries such as the US. It may look like an inversion of supply-and-demand, but the problem is the demand is essentially infinite compared to the change in supply that new construction brings. Without limiting new arrivals, all you've done is increased the desirability.
Like trying to reduce the relative amount of theft by increasing your inventory.
Re:Berlin Fought Soaring Rents and Lost
by Kon-Peki on Wednesday November 15, 2023 @10:15AM
(#38277500)
Too many people want to move to Berlin, from wherever they lived before. Because where they lived before does not offer people what they need and want.
To solve the housing crisis in Berlin, Germany must put in a lot of work to make other cities and towns attractive.
You're oh so fkcing right it's not even funny :-/
I invest in real estate investment trusts (REITs). Analyst reports on apartment REITs project future rents inversely based on construction. Analysts believe that more apartment construction tends to lower rents.
This is not too surprising, but may be specific to large and/or lax-on-immigration countries such as the US. It may look like an inversion of supply-and-demand, but the problem is the demand is essentially infinite compared to the change in supply that new construction brings. Without limiting new arrivals, all you've done is increased the desirability.
Like trying to reduce the relative amount of theft by increasing your inventory.
For example, Estonia has been building many new dwellings, but prices are increasing incredibly, while a quarter of buildings stay unoccupied[1].
[1]: https://news.err.ee/1608648397/statistics-almost-a-quarter-o...
To solve the housing crisis in Berlin, Germany must put in a lot of work to make other cities and towns attractive.